Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm
Nokia Corp. is a global telecommunications company that, in eight years, went from a near-bankrupt conglomerate to a global leader in mobile telephony, delivering almost 30% annual compound growth in revenues during 1992-2000, while shedding businesses that had accounted for almost 90% of its 1998 shares. By spring 2000, Nokia had the highest margins in the mobile phone industry, a negative debt-equity ratio, the most valuable non-U.S. brand in the world, Europe's highest market capitalization, a presence in 140 countries, and unique corporate structures, processes, and culture that gave it the feel of "a small company soul in a big corporate body." Along with growth in size and diversity, however, came growth in complexity. Nokia had to develop multiple businesses and technologies (while dealing with the great technological uncertainties that were inherent in the convergence of mobile telephony and the Internet). It also had to manage a growing network of alliances and a number of acquisitions, mostly in the United States. This case provides the background to the issues Nokia faces as it considers how to meet these challenges while maintaining its unique company values and way of working that made it possible to execute efficiently while continuing to innovate.
Swot Analysis of "Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm" written by John Roberts, Katherine Doornik includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Nokia Telephony facing as an external strategic factors. Some of the topics covered in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm case study are - Strategic Management Strategies, Internet, Organizational structure and Technology & Operations.
Some of the macro environment factors that can be used to understand the Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm casestudy better are - – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, technology disruption,
competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc
Introduction to SWOT Analysis of Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nokia Telephony, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nokia Telephony operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm can be done for the following purposes –
1. Strategic planning using facts provided in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm case study
2. Improving business portfolio management of Nokia Telephony
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nokia Telephony
Strengths Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nokia Telephony in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Nokia Telephony is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Nokia Telephony in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Nokia Telephony has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Technology & Operations industry
– Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm firm has clearly differentiated products in the market place. This has enabled Nokia Telephony to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Nokia Telephony to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Nokia Telephony has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Nokia Telephony has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Learning organization
- Nokia Telephony is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Nokia Telephony is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Nokia Telephony
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Nokia Telephony does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Nokia Telephony is present in almost all the verticals within the industry. This has provided firm in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Nokia Telephony has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nokia Telephony to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Nokia Telephony is one of the leading recruiters in the industry. Managers in the Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Nokia Telephony in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Nokia Telephony are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Nokia Telephony is one of the most innovative firm in sector. Manager in Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm are -
Low market penetration in new markets
– Outside its home market of Nokia Telephony, firm in the HBR case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nokia Telephony is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm can leverage the sales team experience to cultivate customer relationships as Nokia Telephony is planning to shift buying processes online.
Lack of clear differentiation of Nokia Telephony products
– To increase the profitability and margins on the products, Nokia Telephony needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Nokia Telephony is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Nokia Telephony needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nokia Telephony to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, John Roberts, Katherine Doornik suggests that, Nokia Telephony is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Nokia Telephony supply chain. Even after few cautionary changes mentioned in the HBR case study - Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Nokia Telephony vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Nokia Telephony has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Nokia Telephony has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Nokia Telephony even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Nokia Telephony 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Nokia Telephony needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Opportunities Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Nokia Telephony can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Nokia Telephony can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Nokia Telephony can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Nokia Telephony can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nokia Telephony can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Nokia Telephony has opened avenues for new revenue streams for the organization in the industry. This can help Nokia Telephony to build a more holistic ecosystem as suggested in the Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm case study. Nokia Telephony can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Nokia Telephony in the consumer business. Now Nokia Telephony can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nokia Telephony in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Nokia Telephony can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Nokia Telephony can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Nokia Telephony to increase its market reach. Nokia Telephony will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Nokia Telephony can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Nokia Telephony to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Nokia Telephony to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Nokia Telephony to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Nokia Telephony in the Technology & Operations sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nokia Telephony in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Nokia Telephony needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm, Nokia Telephony may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Technology acceleration in Forth Industrial Revolution
– Nokia Telephony has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Nokia Telephony needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Nokia Telephony demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Nokia Telephony can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nokia Telephony can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Nokia Telephony.
High dependence on third party suppliers
– Nokia Telephony high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Nokia Telephony can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Nokia Telephony needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Nokia Corp.: Innovation and Efficiency in a High-Growth Global Firm is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Nokia Telephony needs to make to build a sustainable competitive advantage.
